Correlation Between Finward Bancorp and Fulton Financial
Can any of the company-specific risk be diversified away by investing in both Finward Bancorp and Fulton Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Finward Bancorp and Fulton Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finward Bancorp and Fulton Financial, you can compare the effects of market volatilities on Finward Bancorp and Fulton Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Finward Bancorp with a short position of Fulton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finward Bancorp and Fulton Financial.
Diversification Opportunities for Finward Bancorp and Fulton Financial
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Finward and Fulton is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and Fulton Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulton Financial and Finward Bancorp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Finward Bancorp are associated (or correlated) with Fulton Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulton Financial has no effect on the direction of Finward Bancorp i.e., Finward Bancorp and Fulton Financial go up and down completely randomly.
Pair Corralation between Finward Bancorp and Fulton Financial
Given the investment horizon of 90 days Finward Bancorp is expected to generate 11.05 times less return on investment than Fulton Financial. But when comparing it to its historical volatility, Finward Bancorp is 1.06 times less risky than Fulton Financial. It trades about 0.0 of its potential returns per unit of risk. Fulton Financial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,566 in Fulton Financial on September 12, 2024 and sell it today you would earn a total of 565.00 from holding Fulton Financial or generate 36.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finward Bancorp vs. Fulton Financial
Performance |
| Timeline |
| Finward Bancorp |
| Fulton Financial |
Finward Bancorp and Fulton Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finward Bancorp and Fulton Financial
The main advantage of trading using opposite Finward Bancorp and Fulton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp position performs unexpectedly, Fulton Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fulton Financial will offset losses from the drop in Fulton Financial's long position.| Finward Bancorp vs. Community West Bancshares | Finward Bancorp vs. First Financial Northwest | Finward Bancorp vs. Oak Valley Bancorp | Finward Bancorp vs. Home Federal Bancorp |
| Fulton Financial vs. First Commonwealth Financial | Fulton Financial vs. Heritage Commerce Corp | Fulton Financial vs. Northwest Bancshares | Fulton Financial vs. First United |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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